Sustainability Accounting and Economic Sector

Business Ethics
The definition of business sustainability also known as sustainability involves meeting
environmental, social and financial demands and concerns in order to ensure profitability and
a positive environmental impact. Practices where resources are wasted is clearly not a
sustainable practice.

Ethics are a set of moral principles that govern a person’s behavior. So, ethical
behavior is all about operating in a way in which these principles are not
jeopardized/threatened. While the law may clearly state what is lawful and what is unlawful.
Ethics is all about is right and what is wrong. A business might act lawfully but at the same
time unethically. Ethically speaking, we could say there are four main ways an organization
could be run:
a. Amoral: where the focus is on winning at all costs. So, they may not even act lawfully
let alone ethically.
b. Legalistic: who follow the law but that’s about it. Again, ethics will be barely
considered.
c. Responsive: they recognize that ethics can be helpful and will at times use an ethical
approach to their advantage.
d. Ethical: who place ethics at the very core of their organization. Although they know
there may be costs and effort incurred with prioritizing ethics.

They recognize the benefits in functioning ethically. The key difference here, is that
ethical organizations go way beyond having appropriate policies.
 Prioritized consciously doing the right thing
 Making the business as usual whether that be through paying real living wage
 Treating employees and suppliers right
 Ethical taxation policies or through purchasing ethically accredited
 Assured product and services.

Business ethics, matter now more than ever, without doubt there is an increased
public and policy-led scrutiny towards business ethics, resulting in an expectation of ethical
and transparent practice both from customers and wider society. Once uncovered, an
increasing public and client scrutiny ensure this is happening more and more. Unethical
practices can cause huge reputational damage for the organizations concerned. From
sweatshop labor conditions in fashion, food, and construction supply chains, environmentally
damaging sourcing of materials to misleading claims about vehicle emissions and beyond.
Running an ethical organization will be hugely beneficial to everyone involved. It will:
 Increase staff morale, thereby reducing employee turnover and saving costs
 Boost reputation, which in turn will help to attract the best available talent
 Help to attract and retain the best customers and suppliers
 Generate goodwill in the communities where you operate
 Improve brand recognition in turn boosting sales
 Introduce new sources of finance from ethical investors

The business ethical strategy should embrace four mutually supporting pillars outlined
in the UN Global Compact, both in the direct workforce and supply chain:
 The protection of Human Rights
 Labor standards, it has four main principles:
- Appropriate labor standards, wherever in the world that labor is deployed
- Fair pricing, which is ensuring appropriate pricing and not forcing suppliers into
underpricing
- Commitment to diversity, this means the commitment to fostering a culture of
fairness inclusion and respect
- Fair payment, which is simply making sure you pay everyone on time
 Environment, this means constantly thinking about how you may be impacting the
environment and what you can do to minimize your impacts
 Working against corruption, this covers all forms of corruption, extortion, and
bribery, which could distort the level playing field between organizations.
By making these four pillars business as usual, you can ensure that your organization reaps
the reward for its forward-thinking approach.